Before I get to far, there is a great opinion piece about the government’s role in the sub-prime mortgage crisis and how this led to the Occupy Wall Street movement in the Wall Street Journal this morning.

My real concern, as I state at the top, is the question about what is greed? Is it a bad thing? Are all forms of self-interest necessarily a bad thing? In the popular media, moralizing abounds about people being greedy and only looking out for themselves. Usually, it is CEOs, bankers, businessmen, pretty much anybody involved in finance or business broadly. I started thinking about this while listening to this radio show from Here and Now on NPR. The main guest Mr. Ron Hira, calls out the heads of Microsoft and other IT companies for being “greedy” and “only looking out for their own self-interest.” The entire show is about older IT workers who can’t get jobs, while at the same time, IT companies are looking for relaxed immigration regulations to higher new workers. The story is mildly interesting but the whole time I was thinking, “the IT workers are looking out for their own self-interest too.”
It seems to me that this is a classic case of people using ethics as a will to power. Of course the IT workers are looking out for their own self-interest. They need work. But, it is not correct to say that the only ones looking out for their own self-interest are the CEOs. I am trying here to clarify some terms. On the popular level, greed means something like “wanting any amount of money more than I say you can have.” I should think we could do a little better. I am proposing something like greed meaning, “wanting an excessive amount of money or wealth.” Excessive being the key term that would be difficult to pin down. The old IT worker would be immune from being called greedy simply because he does not have a good enough job (he is a janitor) and wants to work in IT because at one point in his life he was qualified. The CEO, who already has a high paying job, wants cheaper, younger, better trained employees so his/her company can run more efficiently to maker more money is the greedy one.*
*I guess at this point, we should say that because this show was on an American radio station, and presumably most of the listeners are Americans, that we should not be concerned with Indians being able to get work that they are qualified for.
I guess I am just wondering do we really expect people not to act in their own self-interest? Maybe there is a better way to frame this discussion such that we do not just resort to amateurish moralizing in order to get the upper hand in a debate.
I guess I can’t get away from my academic days, so I like a lot of citing. I recently read a great piece by Michael Lewis on the problems in California government, focusing on the local level. He writes, “Alone in a dark room with a pile of money, Americans knew exactly what they wanted to do, from the top of the society to the bottom. They’d been conditioned to grab as much as they could, without thinking about the long-term consequences. Afterward, the people on Wall Street would privately bemoan the low morals of the American people who walked away from their subprime loans, and the American people would express outrage at the Wall Street people who paid themselves a fortune to design the bad loans.”
So, I am circling back to Occupy Wall Street and the IT workers. We are all grabbing as much as we can. We are all self-interested. Let’s not deny that this is the case. What we need to do is find a way to be for our own self-interest while also looking out for the self-interests of others. The mad grabbing and name calling will not work out in the end. I think that there is some kind of “selfishness” that is a bad thing. But, it has to be more than just looking out for your own self-interest because that is unavoidable. Selfishness has to go deeper and more insidious. Selfishness must me grabbing so that no one else can have any and totally denying that my grabbing won’t have larger social implications or caring about those larger social implications.
I have said much about selfishness without bringing it into the theological or religious arena. Some must be wondering, “where is the Scripture quoting and theological language about selfishness?” That is where we get the idea that selfishness is bad isn’t it? Scripture? Certainly, it is. Much of the discussion of selfishness and money comes form Jesus himself. In the Sermon on the Mount in Matthew 6, Jesus says, “No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money.” Moreover, you do not need a prooftext to realize that the purpose of Jesus life was to lay down his life humankind. This example is clear, we should not just look out for ourselves. While, I am not going to exegete all of this, I think that the interesting part in the whole discussion is just before the previously quoted verse. Jesus discusses storing up for yourselves “treasures in heaven.” Jesus does not spell out exactly what he has in mind. However, it is clear that Jesus knows that incentive drives behavior. He does not say, “do not seek out treasure or reward, or any self-interest.” He wants us to have self-interest. Not self-interest that grabs at the complete expense of others. Self-interest that looks out for the interest of others. In the broader context, the Sermon on the Mount is primarily about looking out for other people. This is probably what Jesus has in mind for treasures in heaven, although it is not made explicit.
I think that Paul sums it up nicely when he writes, Phillipians 2:4 – “Let each of you look not only to his own interests, but also to the interests of others.” What I am arguing for is really nothing new. I am not saying St. Paul could have foreseen what is going on in today’s society, but the injunction seems particularly apropos. And, let’s be clear. The people who have failed to look out for the interest of others, are NOT just Wall Street bankers or CEOs. People signed up for the mortgages that they should have known they could not pay for. Our ENTIRE society is at fault for what is going on here and it will take much more cooperation to rebuild it then what I have seen is going on.
Sorry that was so long. Bonbons for those who finished! Although I doubt there were any! Let me know if you did!

I was reading the Wall Street Journal this morning, as I do most mornings (ahh the benefits of underemployment). Anyhow, I was reading a short little article about Timothy Geithner correcting statements President Obama made about what banks were and weren’t allowed to do. Obama’s direct quote was, “Banks don’t have some inherent right just to, you know, get a certain amount of profit.” This was in reference to Bank of America’s decision to charge $5 to any person using their debit cards to make purchases.
First of all, I am glad that Geithner has clarified that the government will not decide how much a bank can profit. It is just my opinion, but I think it would be a scary sign of how much populist opinion could control our government. Banks and Bankers are not all bad, but they do want to make a profit. That is their job. These are not credit unions or not-for-profit banks. And, the idea that the government should impose limits on what some entity can or can’t earn is a scary draconian proposition.
Second, the thing that I find most curious about this is just how free our banking really is in this country. If you are student, you can almost certainly get free checking. If you have some kind of job with direct deposit, you don’t pay anything for banking (at least at BofA). Yes, in the US, we have to pay over draft fees. It is a slap on the wrist and a small immediate loan that the bank gives you so you don’t look like a fool at the checkout counter. What an amazing time we time we live in? We can get money, in a moment’s notice, when we don’t have any! No it’s not free, but it shouldn’t be. Now, individuals will have to pay $60 a year for a service that allows them to have at their disposal all of their money without having to go to the ATM. It can be carried in a neat little card, that fits into a wallet and can be used everywhere from restaurants, to our little town market here in Boise. I have literally bought fruit on the side of the road with a debit card. Unbelievable! And now, I am being asked to pay a little for that service. Yeah I am bummed. I don’t want to give up $60 a year. But, this is not so bad. Go with me for a moment. When I lived in France, I had to pay 7 euro/month just to bank at Societe Generale. I had never had to pay anything to bank until I went to Europe. This is the norm there. Everyone pays a little to bank.*
*On a semi-related note, everyone pays with their debit cards, never credit cards. Most people are fully aware of exactly how much money they have at a given time and spend accordingly. In 2006, less than 50% even owned real credit cards. Now, I am sure it depends on the bank, but I didn’t have overdraft protection, so my card was just declined. I had no access to money if I didn’t have it, which might be in the long run a better system.
Finally, as my insider industry source has told me, this amount is probably what was lost because of a certain addition to the Dodd-Frank bill that passed in Congress during the height of the populist outrage against banks. In the bill, banks were limited in what they could charge companies who used the service of charging at the counter. So, the companies were protected and it has come out in consumer fees. Tit for tat. It was always going to happen my source tells me. And NONE, of any of this, has anything to do with sub-prime lending, credit default swaps, or middle-men taking huge commissions on finding buyers and sellers for this CDOs, or any of the other financial innovations that helped plunge our economy into recession in 2008.
So, we pay $60 a year to use our debit cards and now our President has made it a national issue. What a crazy world we live in.

This is an honest question. I have no idea what this is all about. All Things Considered did a bit on it. They shed some light on the issue. The people they interviewed said they wanted more democracy. They wanted everybody to have a say in any decisions made. Who has time for this?
The guy was a computer science major in college. I am sure that if I could hear more from him he would talk about how because of the internet and the increase of communication channels more people would be able to vote on governmental issues. Seriously though, after just listening to the 5 minute segment I was tired of hearing them vote and talk about what kind of sleeping bags they wanted. Can you imagine if 300 million people had to decide on every blessed issue that came before a legislature? The United States is aREPUBLIC for a reason. We don’t want every person to have to decide on every freaking issue. Finally, what has this got to do with Wall Street? The dude in the interview made some point about not wanting any financial institutions to be “Too Big Too Fail,” (I am paraphrasing. He wasn’t that well spoken). It sounds like his bigger problem is with the government. Sure the two are interrelated and it was the government who bailed out the banks (which many institutions have paid back in full with interest, and possibly too soon), but shouldn’t these people be in Washington?
Cornell West added his voice to the protests, but again his issue was with the way that the government spends their money. Why is he on Wall Street?
It is little surprise to me that most of these people are academics and people without jobs. They have time. I know its not easy in our economy to get a job, but the least that these people with all of this time on their hands can do is put together some kind of proposal and actually protest at the appropriate venue.
I don’t get it.

“The Psychological view of politics is that you can change peoples minds…the economist says that [a person’s] positions are fixed.” This is a quote from a recent podcast done by Planet Money. This being a blog that discusses primarily economics and theology I wondered how I would describe the way in which theology views politics, or more precisely the idea that one can or can’t change anything, most importantly their mind.

There are several ways to describe broadly a theological view of change. On the one hand, religion and religious groups tend to be inherently conservative organization. My favorite example from a Jewish professor I had was the tzitzit that are worn under the garments of Orthodox Jews. He tells how this was ancient Babylonian part of general clothing that was worn by Jews in that day and then continued to be worn because of infused theological significance. His example came from the Medieval Kabbalists who infused supernatural significance to everything. Nevertheless, religious groups tend to resist change. It took until 1960 for the Catholic Church to start using the vernacular instead of Latin in Church services (although I am sure if Lamin Sanneh read this book he would be quick to point out that the Catholic Church did allow some vernacular in the Slavic countries and in certain parts of the liturgy. Read: Translating the Message. No really, read it. Its great). You might think that the New Testament is a form of Christians being willing to change and try something different, but that is only partly true. Jesus never claimed to found a new religion. In fact, he said in Matthew that not even a jot or a tittle has been removed from the law. When his later followers were forced by circumstance to separate themselves from the 2nd Century Jews around the time of Simon Bar Kochba, they still kept the Hebrew Scriptures because in order for their religion to feel it had some legitimacy they had to connect it to something ancient. This still occurs in our day, look at the Latter Day Saints. They didn’t want to just totally reinvent the wheel (which they did in a lot of ways) so they connected themselves to Christianity and the Bible of the Old and New Testaments and then added on a bunch of laws in the Doctrine and Covenants and created something in many ways extremely different from their protestant predecessors.

You could continue to pile on theological examples like the idea of Original Sin or as Dutch Calvinists would add, the Total Depravity of Man (they wouldn’t have been politically correct enough to say “humanity”). Basically, humanity was born into a state of sin and this came from Adam that has affected every single human person born. But, this is also precisely where it is difficult to say whether, in Christian theology at least, theology believes that change is possible. It is in this very notion of original sin that Christians believe that people can change. Metanoia is the Greek word that is often translated repent. It is used throughout the Gospels and the Epistles and it means to precisely change ones mind. It is the bedrock for the Christian idea of conversion. Many people outside the Church and the religious pluralists tend to believe that religion is based solely on the country you came from. If you are from the West, you are a Christian because that is how you were raised. Or, if you were raised in Iran you are Muslim because that is how you were raised. Logically, these are patently flawed arguments but people tend to believe that religion is extremely static. But that notion belies the very foundation of Christian theology at its core. People can and should change.

The mantra of the Reformers of the 16th century was semper reformanda. Always reforming. The protestant church has an extremely hard time with this as an institution. As a large group, we always tend to try and regress towards the old ways. What was, is better. But on the individual level, we must believe that change is possible. It is the difficulty of a large group mentality over and against what occurs at the small group level. I think it is instructive that Jesus spoke very little about establishing the Church as a large institution. Institutions struggle to adapt to their situations.

Let’s bring this back to the podcast. Steven Smith in the podcast discusses this book, Manser Olsen – Logic of Collective Action, which I have never read. But, he talks about a footnote where it states that even an economist can recognize that change can occur when people get together in small groups to discuss what ever issue is at and. What a powerful notion! I find it difficult to deny the logic of incentive driving behavior and the selfishness and stubborn behavior that is evident in studying large groups of people. But for some reason, when people stand face to face minds can be changed. If anyone has read Immanuel Levinas, this is nothing new. He spoke frequently about the “face of the Other.” What a challenge this is from economics to theology. If even the seemingly steadfast rules of incentive can be broken when people gather together as individuals to listen, minds can be changed! Jesus also says something like this when he says, “when two or three are gathered together in my name, there am I with them.” Christ encourages people to gather together because there is power in these kinds of gatherings. What is interesting about that quote from Jesus is that it comes at the tail end of a discussion of what to do when people disagree within the Church! The podcast I have referenced at the top is talking about Congress creating a smaller group to deal with what is at issue in the larger body. Small groups can change minds.

I was working on a post about jobs, but I still can’t figure out what I want to say. I am going to go watch the Cards hopefully beat the Braves.

I tend to take my ideas for posts primarily from my favorite blogs and podcasts that help people like me digest the current topics in economics. One of my favorites, that I will continue to recommend is Planet Money recently did a podcast on what would happen in the event of a default of Greek banks, brought about by a vote against raising the amount of money disposable to the EU to support compromised countries and banking systems. For 20 minutes they discuss the domino effects of what seems increasingly inevitable in that area of probably the largest economic system in the world. What struck me the most about the story, and about the discussion of marketplace and the economy at large, is the issue of trust.
The argument essentially goes that the other European countries don’t trust that Greece or other countries like it (see: Portugal, Spain, Ireland, possibly Italy), can repay them if they lend them money to bail out the governments that have spent way more than they have. (The debt to GDP ratio of Greece is around 150% last I heard). So the Greek banks have lent money to the Greek government that can’t pay them back. The everyday depositors wonder if the Greek banks can then pay them back because they have poured all your money into the black hole that is the Greek government. Do you trust your bank? Other Europeans here about this going on in Greece, say in Portugal or Spain, and they start pulling their money out of their banks. They don’t trust their banks. And, on and on it goes. But at the root of it all is trust.
This is probably not a revelation to many readers. But, it is curious to me. My dad tends to be an optimistic guy, but most of the time that I talk to him about recessions, the mortgage crisis and things of that sort, he always tends to talk about it in a way that says everything will be ok. Now why is that? Is he just an optimist? (Sure partly, that’s why I always talk to him when things are going wrong. He can see a way out). But, whenever journalists or the media tells the story, they seem to be more negative. Maybe they just like to sell disaster scenarios. Planet Money journalists are pretty up front about their negativity. My dad also has an another motive. As a bank employee, he needs to be positive because people have to trust him with their money. I am not saying my dad is a liar or swindler, because he is most certainly the most honest and trustworthy man I know. That is why he is a great banker. What is evidenced is the degree to which our economy lives and dies by this idea of trust.
Our currency itself displays this, “in God we trust.” However, that’s not quite right is it. We trust the money itself that it is worth what it says it is. We trust the government who backs it. We trust the banks that will keep it for us to protect it. We trust the the buyers and sellers in the exchange of goods when we use the dollar as the basis for the trade. The government has built in extra layers of trust like the FDIC and various other government agencies that seek to protect that very trust but at the end of the day its still just trust. You could look at the rising costs of commodities like gold and silver as a kind of index of trust that exists in the US. It is at historic levels. It continues to rise daily. We don’t trust the Fed knows what it is doing. We don’t trust banks to invest our money there. What we trust is gold.
I think one of the most interesting explanations to the reason for the recession that began as a result of the mortgage crisis in 2008 was that our financial institutions became to intertwined and convoluted that they could not be understood. If nobody can understand what Citi Bank or AIG was doing with all their financial instruments, they pulled their money. The trust was gone. They just billowed out of control with their mortgages bundles, credit default swaps and the like. No one knew what exactly was going on and the trust eroded. With the trust eroding, the paper market ground to a halt. There was no money being lent. Companies and entrepreneurs need credit to grow and there was no trust. I am not saying I understand totally what occurred in this absurdly confusing quagmire, but it everything seems to revolve around trust.
I am not sure where to turn with all of this analysis or conjecture, but at the very least, it seems to me that it is disingenuous to fault believers of whatever their respective faiths for their trust in the divine. At bottom, any person who engages in the economy at large places large amounts of faith and trust in institutions that they have to believe have their best interest at heart. Or, if not their best interest, at least they most believe that they will not totally wipe out their life savings. We are a massively trusting people.
One considerable difference in the divine is that we are placing our trust in a being of some sort that we have of course never seen, or that nobody has ever seen. The quote from Hebrews 11:28 comes to mind, “faith is being sure of what you hope for and certain of what you do not see.” However, I am not sure that it only applies to the divine. The same might also be said for money, the government or the banks that we put our trust in. Or, the very notion, which cannot be seen, that our money is worth something. As with all esoteric notions, we only see the effects or evidences of their existence without seeing the thing itself. Why are we more likely to trust the banker or Ben Bernanke than we are a God, the creator and sustainer of the universe? It is at least no more foolish than the wager that we engage in daily by placing our savings and banks and relying on them to give us that money back in 10, 20 years when we need. Or the wager place that the labor we engage in on a daily basis will result in a currency that is trustworthy to be traded for the food and shelter we need in order to preserve our lives. We are tremendously trusting, and faithful people. Do not be fooled. Some of just place more faith in our manmade institutions than the divine.

I think one reason that I have come to increasingly enjoy discussing and learning about economics is that “feelings” play no role in the discussion. If you are a Chicago School Economist, you believe in the free market and limiting the role of the government intervening, let things occur as the will. If you are Keynesian, you think that in order to jump start an economy is for the government to spend money. You have your reasons for why you believe either position is the right one for the situation that the economy is in, but at the end of the day the disagreement is over an arguable position, not your feelings. The problem is the recession. Different people come up with different solutions based on their own study of economic theories. Economics is not perfect and is difficult to test because there is no real lab for economy theories to be tested in. However, the discussion does not fall into the realm of the way people feel. Moreover, it does not have to fall into ad hominem attack. “Your wrong cause your stupid.” I guess rarely is it that simple but that is what most debates feel like on the popular level. On the political level, “If you cared about the poor, you would be a democrat.” This alone is not a valid argument. On a theological level, “if you believed the Bible, you would believe that homosexuality is wrong.” Again, this is not valid argument. The premise that believing in the Bible requires that you believe homosexuality is wrong does not hold for all people.
But, whatever your view on homosexuality, why is it that we cannot disagree with someone and still love them? Why can’t you say, “I think your wrong, but that doesn’t mean I hate you.” One thing that makes theology more fascinating to me than economics is that helps shape a total view of the world. Theology can can supervene on matters of psychology as well as the marketplace. What theologians can learn from the economic, and for that matter philosophic world, is that to say someone is wrong or has an invalid argument is not say that you do not love them or care about their feelings. Just the same that you should not feel bad for telling a child that 2+2 does not equal 5 you should also not feel bad for telling someone that it is not a valid argument to say that “if a liberal tells you something it is wrong.” (Or conservative tells you something from the opposite end of the spectrum.)
In theology, we tend to come up against this stuff when dealing with people who theologically disagree with. I am living in a place that has a large population of Latter Day Saints. I have met protestant Christians here who disagree with the LDS church who are unwilling to love LDS people just because they disagree with them. They seem to think they are unworthy of any accolades just because they are theologically different in some cases.
On a broader societal level, I think that the default position, especially with religion, is rather than to say that someone is right or wrong is to say that they are all the same. Or, “that’s your opinion.” We tend to fall into a bland pluralistic view that downplays that there is any difference and falls merely into the realm of feeling. “Well I feel that Jesus is God.” Or, “I feel that the Book of Mormon is new revelation.” When in reality, to hold that the view that revelation is ongoing is arguable as right or wrong. The standard protestant position is that Scriptural revelation ended with the New Testament. It is a right or wrong position. The LDS position is necessarily anti-thetical to the Christian view. AND THAT’S OK! This does not mean that an LDS person is unlovable. This does not mean that they should be hated and shunned society. I honestly believe that the lack of true philosophical and logical education has harmed so greatly that we cannot have genuine disagreements. (This carries over into the political realm as well, but I am less concerned with that for the moment.) Most of society acts as if saying someone is wrong is a personal attack. It is not! People have conflicting and disagreeable positions. True dialogue actually happens between religions and people who have disagreements when we recognize those disagreements and do not try to gloss over them as if they don’t exist or explain them away into ridiculous untruths like all religions are just the same. They aren’t! And, this won’t help with religious conflict because most adherents of the respective faiths will not just accept this bland position that is popularized by the tolerance police.
This is where the challenge of 1 Peter 3:15 is truly felt, “Always be prepared to give an answer to everyone who asks you to give the reason for the hope that you have. But do this with gentleness and respect.” Being able to love someone and respond to them with gentleness and respect is only a challenge if you recognize a difference and then try to love, co-exist, and discuss with them the point of contention. And chances are you won’t agree when you are done giving an answer. But, in the word’s of the Weepies, “the world spins madly on.”
I am probably rambling a bit here, but it’s just some stuff I have been thinking about in my new world here in Idaho. Please keep reading and give me some comments. Maybe I just haven’t said anything controversial enough to have a comment or response. Cheers!

As the economy continues to sputter and estimates continue to be revised, one man seems to be able to stir up the media and the web 2.0 world. That man, the “Oracle of Omaha,” “the Woodstock of Capitalism”, Warren Buffett.
Yesterday, as many of you have probably heard, Buffett’s Berkshire Hathaway will invest $5 billion in Bank of America, rising the stock of BoA nearly 25%. As the Bloomberg article relates in the previous link, this is of course not the first time Buffett has made major investments in companies and made huge returns. In the middle of the mortgage crisis, Buffett made a $5 billion investment in Goldman Sachs and made a sweet little return of $1.7 billion.
Buffett also made news in the last few weeks by his seemingly strange challenge to Congress, “Buffett said the rich are “coddled” by Congress “as if we were spotted owls or some other endangered species. While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks,” Buffett wrote in a Sunday New York Times Op-ed.” Liberals cheered everywhere on my Facebook news feed. This is one area where the Sage of St. Louis, or my dad, and Buffett part ways. But, be that as it may…
Why I am bringing this up? When is the last time in history one man has had so much power? One investment, one statement, and the world pays total attention. Of course, through history, there have been many men, and women, of power who usually assert their strength through military might, i.e. Alexander the Great, Julius Caesar, Napoleon, Hitler etc. Their have been men who have had great ideas that in the long term have changed the course of Western history, Socrates, Plato, Jesus, Muhammad, etc. But, what makes Buffett so incredible is the age that he lives in allows him to change multi billion dollar corporations in one quick moment. Some of these corporations are the very ones that in the past have been deemed “too big to fail,” for the good of the rest of the country and by relation the world. If America goes down, so does China, so does Europe and on and on. We have seen this domino effect in full force over the length of this recession (which looks like it is moving towards a double dip). Americans often pride themselves on their individualism and their belief that their actions effect only themselves. This is the way we talk about our ethics. “I am going to do what’s right for me.” Or, “I need to do what I need to do.” Granted, Buffett is in a pretty special role, and that is why I brought him up. He seems to have a unique interconnectedness to the world. But, through our decisions we have given people like him that power. We continue to be dependent on large banks and the government to provide credit for our schooling and our mortgages. Especially Americans have banked on the idea that credit is good in all cases and we are beginning to see that this might not be the best long term perspective.
This is a crucial intersection to me of theology and economics. People like Warren Buffett make decisions that will effect the entire country. I am actually somewhat comfortable with Buffett at that helm. Freakonomics has run a podcast about the way Buffett raised his children and seems to be an extremely ethical and conscientious person. Paul in the New Testament writes, “each of you should look not only into your own interests but also to the interests of others.” The whole Levitical legal code in the Hebrew Bible was given in order for them to live together and live well as a community. The 7 year jubilee and many other laws depict a community that is looking out for all people who will be effected. The problem with the American mentality is that we don’t think like a community. We think like individuals. Our perspectives are too often about instant gratification for ourselves and not up the impending disaster that will come not only to others but us too. I am not saying we are always going to act altruistically or without some self-interest. We have to act in some way with a delayed self-interest but it has to be in a larger community self-interest. What happens to us a people at large, will ultimately effect us as individuals. My dad often says, “a rising tide sinks all ships.” This delayed self-interest has to be able to think beyond what feels good at the moment, despite the difficulty that ensues. Another one of my favorite podcasts, not related to economics, is Radiolab from WNYC. They did a show about the difficulty of forcing that part of ourselves that only seeks instant fulfillment at the expense of long term health.
So what am I arguing for? Economics looks primarily at incentive. I am thankful that Warren Buffett’s incentives are to make money, but he is also concerned about the good of the community he is looking in. I am holding him up as an example, for Americans to consider how their actions although seemingly only effecting themselves have a much larger impact. And this large impact will in some cases turn back on them. I think that theology and ethics should guide the interests that Economics studies. But these interests should be long view interests. Not immediate self-gratifying ones. Thoughts? Please make a comment! I might be totally wrong.

I guess this is as good of place as any to start this blog. If you would like to read a little more on how a theology student got interested in economics, see my About Me section . Anyways…

It is rare that these two topics intersect so well as they did in this article from Pope Arrives in Spain . Basically, the story does capture a one sentence line from the Pope’s perspective on what is going wrong in Spain he says, “the market doesn’t function with market self-regulation but needs an ethical reason to work for mankind.” He added that “a moral dimension is ‘interior and fundamental to economic problems.'” What exactly does this mean? Sure enough, the purview of Economics does not include “ought,” or ethics. The “market” helps see you what is in demand or not. What occurs in the market is only regulated by certain laws like the “invisible hand” and the like. The other factor that I think economics often overlooks is human error or inability to act logically, but certainly it is not concerned with ethics. This is not to say that people should not be. We act in a market and ethics should play a role. But, I wonder if the Pope is aware of what has happened in Spain in particular when the Catholic church has been directly involved with financial dealings?

One of my favorite blogs and podcasts is Planet Money. Several months ago, they ran a podcast on the “cajas” in Spain which are basically medieval savings accounts that are often run by people in a community who know nothing of banking. You can listen to the full podcast here: http://www.npr.org/v2/?i=132450100&m=132456232&t=audio. One of the major cajas was run by the Catholic Church. Planet Money goes so far as to call them “the poster child of what went wrong in Spain.” These priests run this not-for-profit banks and start lending at money and giving credit to people who were not reliable, including mortgage problems. Cajasur was the name of this caja. They even started taking on loans themselves in order to start expanding. Its hard to predict exactly what it means that these cajas are failing, but they are part of the larger issue going on in Spain’s debt problems. Over 50% of Spanish people deposit there moeny in these cajas.

If Spain defaults on its loans, these cajas will be part of the problem. It seems that the Pope should have investigated more on what is actually going on in Spain before making a broad claim. Surely, the criticism he leveled could be leveled against these Priests, maybe they need to be regulated as well, but the Pope, as head of the Catholic Church, could have had some jurisdiction. Part of the problem falls on his head as well. The question to be asked is, if the Pope sees it as so clear that ethics should be guiding our markets, why are his own priests part of the problem? I am not saying it was all these priests fault but the Church is the place that the Pope wants people to look for ethical behavior and they clearly failed in this very country. It would have been interesting to hear the Pope expands his comments to include the issues that even his Church was involved in.

If anyone is reading this, do they have any thoughts on the way in which churches like the Catholic church should be involved in economic decisions? Would we have been better off in this case if churches were more involved in market decisions? Or would that have created a worse problem as did in Spain? These are some of the issues that I would like to explore in this blog. I will be working more on these objectives but I was also just hoping to have a place to write my thoughts and work out some of what has been running through my own head. Will see if anyone else finds it interesting too. Thanks for reading.